VA, Interior detail workforce reductions and consolidations under gov’t reorganization

Both the Veterans Affairs and Interior Departments are moving federal employees out of Washington, D.C., and into consolidated regional offices.

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Lawmakers interested in moving some federal entities out of the Washington, D.C. area may already be getting their wish — without much heated public debate.

Both the departments of Veterans Affairs and Interior are already moving some federal employees with customer-facing jobs out of D.C. and to consolidated offices in the field.

VA, for example, is on a path to shrink its human resources function of 7,000 employees in half over the next few years, as the department consolidates HR offices and shifts those offices from transactional work to human capital consulting and strategic planning.

“I’m going to set up centers of excellence. I’m going to have regional HR centers. I’m going to have a new IT system, and over the next several years as these things come online, through attrition we’re going to shrink the HR force by probably 50 percent,” Peter Shelby, VA’s assistant secretary for human resources and administration, said during a Sept. 20 panel discussion in Washington, sponsored by Government Executive. “It’s going to be a big shrinkage there.”

The department closed the human resources function at the VA Central Office in Washington a few weeks ago. About 28 people from the central VA HR office are being moved to other positions in the department and will start new jobs Oct. 1.

“I don’t think anybody’s moving from D.C.,” Shelby told reporters after the panel. “We have enough capabilities still here in D.C. When we get to the point [when we say,] ‘You are the guy, and I really need you in Indianapolis, or your position is moving to Indianapolis,’ we’ll have the resources to relocate them if that’s what they choose to do. Some people will choose, ‘No, I don’t want to relocate.’ We’ll place them. We have an internal placement capability when jobs are eliminated. … We have a policy that they have the priority.”

The National Cemetery Administration consolidated all of its HR functions into one office in Indianapolis. The department also started consolidating all Veterans Benefits Administration retirement functions into one location in Topeka, Kansas.

“They’re kind of our model,” Shelby said of his Indianapolis and Topeka offices. “That’s the benchmark and that’s the direction I want to go to.”

The ultimate goal, Shelby said, is to move customer-serving HR services out of the D.C. area.

“We just can’t compete for talent here,” he said, adding that it was too expensive to keep top HR expertise in the Washington area.

Shelby said he hopes attrition, which currently sits at a rate of 9 percent in the department, will prevent VA from taking major reduction actions.

“We have the capacity to retrain them within the organization, or move them around in the organization,” he said. “I am very confident that at the end of this, there won’t be much unwanted attrition, in that people aren’t going to be RIFed and put out of a job.”

Yet the department still has a long way to go before it fully realizes Shelby’s vision. VA still has 172 offices across the organization.

A new HR IT system will help. VA is implementing the PeopleSoft Oracle application, in addition to Salesforce, which will automate 60 percent of the department’s current human resources workload, Shelby said.

Like his colleagues in other leadership positions at VA, Shelby acknowledged the change, particularly of this magnitude, is often scary. Involving front-line employees in reorganization discussions and planning is the best communication method, he added.

“I hope to convey that message across to everybody we work with, that this is not a self-serving venture; it’s not us against you,” Shelby said. “We are in this together to optimize Veterans Affairs in order to best serve veterans.”


Many of the Interior Department’s proposed actions for reorganization will require congressional approval, but the agency also sees employee reassignments and relocations as a key aspect of its plan.

Interior has asked the Office of Personnel Management and OMB for a “very broad” VERA/VSIP authority in effort to shrink the size of its workforce and move more people from their positions in Washington out to field offices.

“The expectation is we need to shrink our footprint in D.C. and Denver to move those jobs,” said Raymond Limon, director of the Office of Human Resources and deputy chief human capital officer at the department. “Numerically, we don’t necessarily have a target, but [there’s] an expectation that where people can perform in the field, we should do it. And dare I even say, virtually, because that’s OK too.”

Limon said Interior hadn’t received final VERA/VSIP approval yet.

The department has more than 70,000 employees in 24 different operating locations across the country. About 6,500 of its employees work in Washington, while 9,000 work in Denver.

“Most of our partners are out west,” Limon said. “Our national parks are everywhere, but some of the larger parks are out west. We manage about 75 percent of all the water that’s west of the Mississippi, so we want to get closer to our stakeholders.”

Interior already reassigned about 30-to-50 of its 275 senior executives to new positions. Some moved to entirely new geographic locations. Some Interior senior executives told Federal News Radio that another round of SES reassignments was imminent, but department leadership hasn’t made the move yet.

Interior’s first round of SES reassignments is the topic of an ongoing inspector general investigation.

Yet the department is planning for more geographic moves, as Interior shifts more work and responsibilities to specific regions across the country.

“As [full time equivalents] FTEs shift, assigning them out to a more regional structure is something that we’re going to do,” he said. “Moving people around, as a federal employee, is not a cheap proposition. We’re going to have to do this smartly and in proper sequence.”

Like VA, HR specialists at Interior will likely see their job responsibilities shifted, as the nature of human resources changes from transactions to more strategic, consultative work.

“There are going to be some opportunities around support services that can come together in a shared services model,” Limon said. “Perhaps we don’t need as many HR people or as many IT people, or budget or acquisition type of support services, because there’s a lot of people who do that really well right now. Maybe we need more engineers, more scientists, that could allow us to shift FTEs to expanding and emerging occupations. I don’t think we’re going in at the mindset that we’re cutting FTEs. We’re always going to work to our budget.”

Small Business Administration

Meanwhile, OMB has already given the Small Business Administration the green light to begin implementing some of the agency’s reform recommendations.

Unlike many other agencies, SBA’s 2,000 employees won’t likely see many buyout or early retirement offers. The agency’s workforce has been slowly shrinking since the 1990s, and SBA is taking a careful approach to manage its workforce and comply with budget cuts.

“We are not going to be doing a reduction in force at SBA,” SBA Chief Human Capital Officer Elias Hernandez said. “We are not going to be offering [VERA/VSIP] at SBA. There is so much attrition that’s already taking place in the organization, that we want to manage the agency reform and the adjustments that we need to make based on our budget, based on the attrition that’s going on at the organization.”

SBA is still hiring and looking to fill about 200 vacancies. Proposed hiring actions must get approval from an agency executive team, which determines whether the position fits in line with SBA’s reform plan.

Like many other agencies, SBA is also rethinking its approach to shared services. Hernandez said SBA is moving its time and attendance and onboarding activities from the National Finance Center to the Interior Business Center, and it wants to find more capabilities that it can shift to a shared services organization.

Performance management is also getting a heavier focus in SBA’s reform plan. Hernandez said the agency is reviewing employees’ responsibilities and looking for activities that are redundant or unnecessary. From there, SBA will update performance expectations.

“We want every employee to be part of this process,” he said. “We want every employee to be accountable for the accomplishment of the organization. We are putting a heavy emphasis in training our managers and supervisors [and] in training our employees, with regards to how to properly put in place performance expectations.”

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